Nearly 14 years after abandoning its authoritarian government, Indonesia may claim to have a functioning democracy; an open debate with wide public participation over an issue as important as fuel prices is certainly one positive indicator. But there are also grounds for arguing that Indonesia is now veering towards a dysfunctional democracy, one where populism and the rule of the majority have increasingly overpowered rational and moral arguments for more responsible government.

The will of the people has prevailed in guaranteeing that the price of gasoline in Indonesia — at the equivalent of 50 cents per liter — remains among the lowest in the world. Indonesia’s "noisy democracy" went up by several decibels in the weeks before April 1, the day fuel prices were due to increase by 33 percent. No political cause is more popular in Indonesia than cheap gas: Almost everyone (except perhaps those who have to balance the books at the end of the day) embraces it. The outcome of this debate — in the House of Representatives, in TV talk-show programs, in cafes, in offices and in the streets — was inevitable, if not predictable: They who advocate cheap oil win.

The government, whose job is to balance the budget or find the money to pay for the heavy cost of subsidizing domestic fuel consumption, is almost alone. Lost in the noisy debate was their argument that the energy subsidy bill for 2012, at 225.35 trillion rupiah ($25 billion), was already eating up 15 percent of state spending. That’s a huge sum, one that could be better spent on more important social and economic programs, such as poverty eradication, schooling, health care for the poor, or the construction of economic infrastructure. The other argument — that the gasoline subsidy is enjoyed mostly by the wealthy rather than the poor — was also lost in the debate.

Indonesia may have been rich in oil once, but the new millennium saw rising domestic consumption and rapidly falling reserves, turning the country from an oil exporter to a net importer. Old habits (and paradigms) die hard: Indonesia only quit the Organization of Petroleum Exporting Countries (OPEC) in 2008. Judging by the recent national debate about fuel prices, it appears that most people still believe, or would like to believe, that Indonesia is still flush with oil.

Cheap oil unfortunately also means cheap politics. What those advocating for cheap oil are not saying, out of ignorance or self-interest, is that someone, somewhere, will have to pay for that (costly) fuel subsidy. The pro-cheap oil side may have prevailed, but the government of President Yudhoyono is not the ultimate loser in this game. The biggest losers are the people and the taxpayers — in other words, the entire nation. The very same people the advocates for cheap oil claim to speak for will have to pay the price, either through taxes or the potential loss of services such as education and healthcare.

This defeat could effectively turn Yudhoyono — who is half-way through his second and constitutionally last term – into a lame duck president for the next two years. The defeat in the House and in the streets shows how much his popular support has declined since he won office with a 62 percent mandate in 2009. Two parties that joined his coalition government in 2009 also voted with the opposition to ensure his defeat.

Reports of corruption within Yudhoyono’s Democratic Party, and his failure to fire those involved, have some people wondering whether the president — the man who won the 2004 and 2009 elections on anti-corruption platforms — still has the moral authority to lead: In his first term, Yudhoyono increased fuel prices three times, with little opposition in the House or in the streets, using the same arguments that he employed this year. The difference is that, this time around, people have simply stopped listening to him.

More troubling for Indonesia’s nascent democracy is the message sent with this government defeat: If you can’t win your case through a civil debate in the House, mobilize the people in the streets to wage your fight for you. And don’t forget to make ample use of the catchphrase "on behalf of the people." What we saw in the streets just now was not so much "people power" as it was "mob power." Indonesians will have to brace themselves for an even noisier democracy in the coming years.